YouTube broke new ground in May with the launch of its paid channel subscriptions, a new feature that will dramatically change the video content platform. Paid channel subscriptions create a new revenue stream for the Google-owned website while also creating income opportunities for video creators.
The company revealed earlier this year that paid channel subscriptions were in development, but a timetable wasn’t provided at the time. The appearance of two lines of Android programming code tipped off industry observers to the new feature just days before the company made a formal announcement.
Paid channel subscriptions will bring the platform one step closer to cable television and online entities such as Hulu and Netflix. By charging subscriptions for content, the company now has an infrastructure that could support original shows, movies and even entire television channels finding their way to the online video platform.
A Strong Challenge to Cable TV
Television is already well aware of how its viewers are gravitating toward alternative media. Instead of simply watching a show as it airs live, consumers can use their DVRs to record for later viewing or, in many cases, find the show online. Consumers now watch TV on computers, tablets and smartphones, and in transit just as easily as from the comfort of their couch.
As these alternatives create a more competitive market, some of the hallmarks of cable television could face a shortened shelf life. Channel bundling — which only allows consumers to purchase channels in large packages rather than one-by-one — has been under fire for several years although it remains an industry standard.
YouTube may be a direct challenge to that business model. Its channel subscriptions will allow consumers to pay for exactly what they want, and for rates as low as $0.99 per month. This model could attract some lower-tier television channels that find YouTube more lucrative than being squeezed into a channel bundle without much of a financial return.
But paid subscriptions won’t just benefit cable channels and serial shows. Any stream of content could conceivably receive subscription revenue, adding yet another source of income to online video advertising. Packaging content into a cohesive channel also presents a great opportunity for branding.
Monetizing Heavy Mobile Integration
YouTube is already one of the most popular mobile apps on the market. While paid subscriptions are initially being released onto traditional computers, mobile is the long-term goal. The video platform is deeply integrated with Android devices, and that infrastructure only increases the value of making subscription-based programming available.
Because of the added revenue stream and the growing popularity of mobile viewing, video will become more lucrative for both content creators and mobile marketers. But unlike the past, the branding of each paid channel will be a much more important consideration — and a tool that, properly used, could further increase branding and consumer reach.
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